Advanced Info Service Plc (AIS)'s prospective earnings were revised downward by 8.2 per cent for 2006 and 6.5 per cent for 2007, due to the impact of the recent boycott against its service, according to a new report by Phatra Securities.

In the report issued early this month, the securities house based its forecasts on the fact that in February AIS net subscriber additions fell 68 per cent from January and 65 per cent from February 2005.

That was the lowest growth rate since February 2000 and the phenomenon was attributed partly to a boycott against its service. Net subscriber additions are expected to remain weak in March and April before gradually recovering in May.

But Phatra predicted that because political tensions have eased, the boycott against AIS would soon end. Thus, AIS will unlikely continue its aggressive promotions.

In January, the Singapore's state investment arm, Temasek Holdings, through its subsidiaries, Cedar Holdings and Aspen Holdings, acquired a 49.6-per-cent stake in Shin Corp Plc from its major shareholders, the Shinawatra and Damapong families. Shin is the parent of AIS.

Activist groups, who have likened the deal to a sale of national assets (including its iTV Plc television station and Shin Satellite Plc, a satellite operator) to a foreign investor, launched a campaign to boycott products linked with Shin and Temasek.

Currently, Cedar owns 51.98 per cent of Shin while Aspen holds 44.14 per cent.

Last month, Somprasong Boonyachai, chief executive of AIS, said that the company's net additional subscribers in the first quarter would likely be lower than the 332,900 recorded in the same period last year, due to several negative factors, including sentiment against the Shin-Temasek deal.

AIS currently has more than 16.5 million customers. Shin owns a 42.8-per-cent stake in AIS.

A telecom industry source said that Shin was waiting for the political tensions to ease before making any new business moves, including looking for local partners.

Last year AIS posted a net profit of Bt18.9 billion, down from Bt20.3 billion in 2004. Its revenue dropped to Bt92.5 bil-lion from Bt96.4 billion a year earlier as revenue from services and equipment rentals dipped to Bt80.5 billion from Bt84.4 billion.

In 2006, Phatra expects AIS to reap Bt98 billion in revenue, a Bt5.6-billion increase from 2005. But, gross profit is forecast at Bt38.9 billion, only a Bt539 million increase.

That indicates tougher competition eating into the company's gross profits.

Despite the sharp drop in AIS net new subscribers, competitor True Move's February net additions increased only 1 per cent month on month. According to the analyst, it is only logical to assume that the second-largest cellular operator Total Access Communication (DTAC) is the likely major beneficiary of the boycott against AIS, given that most people in Bangkok still perceive DTAC as having a higher network quality than True Move.

DTAC executives declined to reveal the number of net new subscribers in the first quarter, pending their quarterly earnings announcement next month.

The AIS share price on Tuesday closed at Bt89 up from Bt88 on Monday. 

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